UK Treasury says it will not be going back on its decision to raise remote gaming duty

Despite further representations by the Minister for Trade and Industry on the potential impact the increase in Remote Gaming Duty would have on Gibraltar, the UK Treasury says it will not be going back on its decision.

Nigel Feetham had also sought an amendment to the UK Finance Bill to mitigate expected cost-cutting and redundancy programmes the industry is expected to face and to protect Gibraltar’s economy, but this was not accepted.

The Treasury says it will continue to monitor developments and Mr Feetham says the Government will continue to gather data and share it with London.

In a letter to the Minister for Trade and Industry, Nigel Feetham, the Exchequer Secretary to the Treasury, Dan Tomlinson leaves the door open to continued dialogue but makes clear the changes to the rate of gaming and betting duties are "an important part of the package to raise over a £1b  per year to the Exchequer, which contribute to fully funding the removal of the two child benefit limit from April."

The letter follows concerns set out by Mr Feetham about the potential impact of the measures on effective tax rates and business viability and employment in Gibraltar and the UK, particularly for smaller and more leveraged firms.

Mr Tomlinson is clear there are no plans to reverse the decision saying the "UK Government believes it is appropriate to retain the existing basis for the calculation of Remote Gaming Duty and General Betting Duty, in line with the policy announced in the budget."

And, he says HMRC will be working with the sector to provide clear guidance and to minimise unnecessary administrative burden.

On the issue of the risk of activity shifting to the illicit market, he says "The Gambling Commission is already active in tackling illegal operators and enhancing consumer protections."

The letter adds that recognising the challenges posed by modern technology and the ability of illegal websites to target UK consumers, the UK Government will be " providing an additional £26 million over three years to the Gambling Commission to strengthen enforcement and to tackle illegal gambling." This investment, it adds, is intended to reinforce the legitimate, regulated market and help mitigate the risks the Gibraltar Government has described.

Mr Tomlinson thanks Mr Feetham for the evidence on the impact of the reforms and the Gibraltar Government for its constructive engagement and "support for a well-regulated and sustainable UK facing online betting and gaming sector" but says the UK Government does not intend to change the tax base or to legislate for the alternative approach suggested by Gibraltar.

The money the UK expects to raise from the rise appears to be well and truly budgeted for.

Earlier this month, following the Joint Ministerial Council meeting in London, the UK reaffirmed its commitment to the economic support of its Overseas Territories.

But when it comes to the gaming hike it's got no issue borrowing from Peter to pay Paul.

Mr Feetham has previously told GBC that, because of the timing of collection of the increased UK gambling tax, the full impact on Gibraltar’s tax revenues will not be noticed immediately, but is expected to be felt in the new financial year starting on the first of April.